Change to business personal property tax not likely this year

Legislation that would have changed the way the state determines what companies are exempt from paying taxes on business equipment appears to be dead for this session, but the bill’s author plans to keep advocating for his proposal.

Senate Bill 385, authored by Sen. Aaron Freeman, R-Indianapolis, would have based the exemption on the assessed value of equipment—called personal property—rather on the value at the time the company acquired it.

The Senate approved the bill 40-9 earlier this month, but it failed to get a hearing in the House. The deadline for committees to consider bills from the opposite chamber was Thursday.

Freeman’s proposal comes one year after the Indiana General Assembly doubled the threshold to qualify for the exemption from $20,000 to $40,000. The change meant that starting in 2021, property acquired for less than $40,000 would not be subject to the personal property tax.

The exemptions are meant to keep address the fact that small companies sometimes pay accountants more to calculate and file the paperwork for personal property taxes than the firms actually pay in taxes.

Freeman said the increase in the exemption “was a great first step” in helping small companies. But he said the exemption is even more helpful if it’s based on the value of equipment today, rather than what a firm paid for it years before.

Freeman said even though the House Ways & Means Committee did not hear the bill, he will still look for ways to get the language into law this year. And if he’s not successful this year, he’ll re-introduced it next year.

“I am very passionate about it, and if there is a landing spot for a bill such as that, believe me in the next 10 days I will be looking for a home,” Freeman said.

House Ways and Means Chairman Tim Brown said it’s too soon to consider another change to the personal property tax, because legislators still need to assess the impact of increasing the exemption.